'Undermining trust'

"JP Morgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses," said George Canellos, co-director of the SEC's division of enforcement.

The Wall Street firm, one of the biggest investment banks in the world, is paying $300m to the US Office of the Comptroller of the Currency (OCC), and $200m will go to both the Securities and Exchange Commission (SEC) and the US Federal Reserve.

A further £138m will be paid to the UK's Financial Conduct Authority as part of the global settlement.

It said JP Morgan's conduct "demonstrated flaws permeating all levels of the firm: from portfolio level right up to senior management".

Tracey McDermott, the FCA's director of enforcement and financial crime, said the failings had undermined trust and confidence in the UK's financial markets.

"This is yet another example of a firm failing to get a proper grip on the risks its business poses to the market," she said.

Analysis

The Wall Street giant will be hoping that the settlement means it can put the London Whale debacle behind it - and start re-building its reputation.

Yet, for people here at the New York Stock Exchange, today's news of the massive fine has barely registered.

Shares have made very little movement, and some traders here find the story, well, tiresome.

The fines were expected and JP Morgan has steadily been setting money aside for the financial punishment it knew was coming.

As long as the bank continues to make money for investors, the reaction will continue to be muted.

'Acknowledged mistakes'

"Senior management failed to respond properly to warning signals that there were problems.

"As things began to go wrong, the firm didn't wake up quickly enough to the size and the scale of the problems. What is worse, they compounded this by failing to be open and co-operative with us as their regulator."

The London Whale was the name given to then-JP Morgan derivatives trader Bruno Iksil, who is believed to have racked up the losses and is now co-operating with authorities in criminal cases against other traders.

The bank's chief investment officer, Ina Drew, stepped down following the revelation of the losses in 2012.

Mr Dimon, whose "tempest in a teacup" comment in April 2012 prompted criticism he was underplaying the affair, said in a statement on Thursday the bank "accepted responsibility and acknowledged our mistakes from the start".

"We have learned from [our mistakes] and worked to fix them. We will continue to strive towards being considered the best bank - across all measures - not only by our shareholders and customers, but also by our regulators," he said.

"Since these losses occurred, we have made numerous changes that have made us a stronger, smarter, better company."

Another fine

According to the CFPB, between October 2005 and January 2012, JP Morgan Chase customers were charged monthly fees ranging from $7.99 to $11.99 for "identity theft protection" and "fraud monitoring" services which were never actually performed.

Some customers exceeded their account limits due to these fees, and thus were fined double.

Approximately 2.1 million customers of the bank are expected to get refunds.

"At the core of our mission is a duty to identify and root out unfair, deceptive, and abusive practices in financial markets that harm consumers," said newly-installed CFPB director Richard Cordray in a statement.